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What you need to know and what it will mean if you need to extend the scheme.

Mortgage lenders will continue to offer mortgage payment holidays to some financially vulnerable customers after the government scheme ends on the 31st of October 2020.

The Financial Conduct Authority have written to lenders to request that they continue to offer payment holidays for borrowers who need short-term support.

From November banks won’t be under any obligation to do this. The FCA have confirmed that taking a payment holiday will affect a borrower’s credit report once the scheme ends.

This means that taking a mortgage holiday could affect the borrower’s ability to secure any further finance in the future.

‘However, it is very important that consumers who can afford to resume mortgage payments should do so for their own long-term interests and so that help can be targeted at those most in need.’

What are the current options?

At the moment, some lenders are offering borrowers three ways to defer their mortgage payments and are granted on a case by case basis. They are;

  1. Some borrowers will be able to extend their loan, effectively adding the extra three months onto the end of their term.
  2. Others are being offered the opportunity to increase the mortgage size but keep the same term length. This means that the mortgage will be paid off over the same period, but your payment will increase.
  3. Another option that some lenders are offering is a shorter-term repayment plan, giving the borrower the opportunity to pay the debt back sooner over a period of, for example, six months.

Not all lenders will be offering all borrowers all of these options. Speak to your lender to find out which one you might be able to take.

Normally a payment holiday is granted on a case-by-case basis with financial hardship and general situational factors taken into account. From November, lenders will likely go back to using this approach.

What can you do?

Firstly, It is essential that customers go online or contact their lender to consider the best solution for them. Communication is key!

Secondly, if you need some additional guidance or support, please contact myself or Rob Ferguson at Suttons on 0161 969 1703 and we will be happy to assist you.


“Your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it.”